A real-world case of property fraud and a new law

Here is a real-world case of property fraud Galvan v. Poon (2023) and a new law - Title Fraud and Public Act 154 of 2024 (EFF March 2025)

A real-world case of property fraud

Galvan v. Poon (2023)

Silent Fraud and Warranty Deed Dispute 

In this Michigan Supreme Court case, the plaintiffs purchased a condominium in Ann Arbor. The sellers transferred the property via a warranty deed, which guaranteed the property was “free from all encumbrances” under MCL 565.151. However, after purchase, the buyers discovered serious building code violations, including the absence of a required firewall and structural encroachments.

  • The City of Ann Arbor sued the new owners to enforce compliance, costing them over $18,000.

  • The buyers sued the sellers for silent fraud, fraudulent concealment, and breach of warranty.

  • The jury found in favor of the buyers on the fraud claims, but the trial court dismissed the breach of warranty claim.

  • The Michigan Supreme Court ultimately ruled that a building code violation not yet enforced at the time of sale does not constitute an encumbrance, reversing the Court of Appeals.

This case underscores the importance of full disclosure and the limits of warranty deed protections.

FORM OF DEEDS, MORTGAGES, AND ACKNOWLEDGMENTS (EXCERPT)
Act 187 of 1881

565.151 Form; warranty deed.

 

Sec. 1.

     That any conveyance of lands worded in substance as follows: “A.B. conveys and warrants to C.D. (here describe the premises) for the sum of (here insert the consideration),” the said conveyance being dated and duly signed, sealed and acknowledged by the grantor, shall be deemed and held to be a conveyance in fee simple to the grantee, his heirs and assigns, with covenant from the grantor for himself and his heirs and personal representatives, that he is lawfully seized of the premises, has good right to convey the same, and guarantees the quiet possession thereof; that the same are free from all incumbrances, and that he will warrant and defend the title to the same against all lawful claims.

Title Fraud and Public Act 154 of 2024

Michigan enacted Public Act 154 of 2024 to combat rising title fraud cases, especially those involving forged quitclaim deeds.

  • Fraudsters were filing fake deeds with county Registers of Deeds, creating tangled ownership records.

  • In some cases, unsuspecting buyers purchased homes from imposters, only to have the real owner later void the sale.

  • The new law, effective March 2025, amends MCL 565.371 and introduces two felony charges:

    • Up to 3 years for recording a false conveyance with intent to deceive.

    • Up to 10 years for knowingly drafting or submitting fraudulent documents to defraud a property owner.

This legislation empowers Registers of Deeds to flag suspicious filings and refer them to prosecutors, offering stronger protection for homeowners and buyers.

FRAUDULENT CONVEYANCES (EXCERPT)
Act 98 of 1883

565.371 Recording fraudulent conveyance of realty; penalty.

Sec. 1.

    (1) A person that procures or places upon record any conveyance of real estate with intent to deceive any person as to the veracity of the document recorded is guilty of a felony punishable by imprisonment for not more than 3 years or a fine of not more than $5,000.00, or both.
    (2) A person that knowingly and willfully drafts or submits a document to be filed and recorded with a register of deeds in this state with intent to defraud the owner of real estate or the owner of an interest in real estate is guilty of a felony punishable by imprisonment for not more than 10 years, a fine of not more than $5,000.00, or both.
    (3) If the register of deeds believes a document was submitted to the register of deeds in violation of this section, the register of deeds may provide evidence of the violation to the county prosecutor in the county where the register of deeds is located.

How Attorney Ann Howard Can Help

With decades of experience in real estate law, Attorney Ann Howard ensures your property transaction is secure from start to finish. She meticulously reviews contracts, verifies title authenticity, and confirms that all documents are legally binding and compliant with Michigan law. Whether you’re buying, selling, or refinancing, Ann Howard provides peace of mind by protecting your interests and preventing costly legal issues.

FAQs

For Sale by Owner Michigan

For Sale by Owner FAQs

Types of Property Fraud and How to Protect Yourself

Q: How can I check if someone has fraudulently transferred my property title?

A: You can search your property records through your county’s register of deeds website. Many counties offer free alerts for any changes to your title.

Q: Is title insurance really necessary if I already own my home?

A: Yes. A Homeowner’s Policy of Title Insurance can protect you from future claims or fraud, even after you’ve owned the property for years.

Q: What should I do if I suspect property fraud?

A: Contact a real estate attorney immediately. You should also notify your county recorder’s office and file a police report if necessary.

For Sale by Owner Attorney Ann-Howard

Call: 248-752-0650

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